Acorn Capital began with an enquiry in 1998 by Barry Fairley, our founder and Managing Director, into why the cost of capital was so high for the junior gold mining company he managed and part owned. He quickly identified that the cost of capital was high for all small companies (microcaps, as Acorn Capital subsequently defined them). He then recognised that if the cost of capital for small companies was high, the potential for investors in those companies was also high.

But small companies routinely failed, the microcap sector lacked liquidity and the standard of corporate governance was poor. Offsetting these challenges was the fact that 80 percent of the ASX stars over the previous 10 years had started as microcaps. And both buy and sell side research of these companies was slight or non-existent.

So a properly structured investment process that sought to mitigate the risks particular to the microcap sector while exploiting the opportunity it represented was developed, involving extensive investment and academic research. The basics of the investment process that emerged were sector and style neutrality; a best of sector approach; intensive industry and company research; a large number of small bets; and patient dealing. Fourteen years on, these are still the fundamental elements of Acorn Capital's investment process.



By January 2000 Acorn Capital had formed an alliance with Australian Unity Funds Management and recruited an investment team of four experienced personnel supported by four support staff. The company declared it was open to business in June 2000 and was awarded its first mandate in September 2000.



After three years Acorn Capital's investment process and investment performance had begun to attract widespread attention and the company accepted new mandates. In September 2003 the company closed to net new business with a "pipeline" of mandates waiting to be invested. This process was completed by September 2004 and funds under management (FUM) passed $500 million for the first time.

2005  By the end of 2005 the team had risen to 10 staff and FUM to nearly $700 million.


In February 2009, after two years of research and development, the private markets product was launched. This product, which invests in a combination of listed and unlisted Australian microcap equities, was staffed by two new personnel supported by two (part-time) analysts.
FUM had fallen to just under $500 million from a peak of $1.3 billion as a consequence of the global financial crisis. Acorn Capital personnel at this point numbered 15.


After a prolonged investigation into the viability of replicating Acorn Capital’s successful investment strategy and process for an Asian product, the Board approved the recruitment of an Asian investment team of five. In addition three additional appointments were made to bring greater depth to the team. This brought Acorn Capital’s total team numbers to 23.
FUM had recovered from the GFC depths and risen to $1.2 billion.


The Asian Small Cap ex Japan product was launched in December 2012. Over 2012 and 2013 two additional positions had been created and filled, bringing staff numbers up to 25.


Acorn Capital Board
The Board consists of two Australian Unity representatives (currently Rohan Mead, Australian Unity Group Managing Director and David Bryant, Head of Australian Unity Investments), Emeritus Professor Bob Officer AM (Chairman), Professor Robert Brown, Managing Director Barry Fairley and Douglas Loh. Bob and Robert bring strong academic focus to the investment management function.


Over the 13 years to end December 2013 the Acorn Capital Composite has outperformed its benchmark by more than 6 percent per annum and the All Ordinaries by more than 4 percent per annum.